OBJECTIVE Endothelial differentiation is a fundamental process in angiogenesis and vasculogenesis with implications in development, normal physiology, and pathology. To better understand this process, an in vitro cellular system that recapitulates endothelial differentiation and is amenable to experimental manipulations is required. RESULTS Embryonic cell lines that differentiate exclusively into endothelial cells were derived from early mouse embryos using empirical but reproducible culture techniques without viral or chemical transformation. The cells were not pluripotent and expressed reduced levels of Oct 4 and Rex-1. They were non-tumorigenic with a population doubling time of approximately 15 hours. When plated on matrigel, they readily differentiated to form patent tubular structures with diameters of 30 to 150 microm. The differentiated cells endocytosed acetylated low-density lipoprotein (LDL) and began to express endothelial-specific markers such as CD34, CD31, Flk-1, TIE2, P-selectin, Sca-1, and thy-1. They also expressed genes essential for differentiation and maintenance of endothelial lineages, eg, Flk-1, vascular endothelial growth factor (VEGF), and angiopoietin-1. When transplanted into animal models, these cells incorporated into host vasculature. CONCLUSIONS These cell lines can undergo in vitro and in vivo endothelial differentiation that recapitulated known endothelial differentiation pathways. Therefore, they are ideal for establishing an in vitro cellular system to study endothelial differentiation.